Oppewal v. CIR, No. 72-1126.
| Decision Date | 03 October 1972 |
| Docket Number | No. 72-1126. |
| Citation | 468 F.2d 1000 |
| Parties | Jacob OPPEWAL et al., Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee. |
| Court | U.S. Court of Appeals — First Circuit |
Jacob Oppewal, pro se.
Harold C. Wilkenfeld, Atty., Tax Div., Dept. of Justice, with whom Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Gary R. Allen, and Joseph M. McManus, Attys., Tax Division, Department of Justice, were on brief, for appellee.
Before COFFIN, Chief Judge, McENTEE, Circuit Judge, and HAMLEY*, Senior Circuit Judge.
In their federal income tax return for 1968, Jacob and Leona G. Oppewal, of Whitinsville, Massachusetts, deducted as a charitable contribution, the sum of nine hundred dollars they had paid that year to the Whitinsville Society for Christian Instruction (Society). The Commissioner of Internal Revenue disallowed this to the extent of six hundred and forty dollars on the ground that this sum, representing the cost to the Society of educating taxpayers' two children that year, constituted a non-deductible personal expense under section 262 of the Internal Revenue Code of 1954 (Code), 26 U.S.C. § 262.
On this ground the Commissioner declared a 1968 tax deficiency in the amount of $153.22. Taxpayers petitioned the Tax Court to redetermine the asserted deficiency. The Tax Court adhered to the Commissioner's determination, its findings of fact and opinion being reported at 30 T.C.M. 1177. Taxpayers appeal to this Court.
The controlling facts are not in dispute. The Society was organized in 1924 ". . . for the purpose of advancing the cause of education . . ." It was, during the taxable year 1968, an organization exempt from tax under section 501 of the Code, 26 U.S.C. § 501. The membership of the Society consisted of three hundred and twenty contributing individuals and families, some ninety of which had children attending the school. The Society solicited and received gifts from members, non-members, churches and other organizations.
Members who were parents with children in the Society's school were solicited in the same manner as were non-parents. Money received was not put into donor or students accounts but was put into a general operating fund. No child obtained the opportunity to attend the Society's school by reason of any contribution made, nor was any child barred for lack of a contribution. Approximately forty percent of the total Society receipts was collected from the contributions of parents who had children in the school, though a record or tally was not kept. Funds were solicited on the basis of what a person could afford to give rather than on a per capita basis.
Funds normally came to the Society on a regular established basis rather than as a result of a drive or newly-initiated program. Solicitations were made from time to time on a personal basis. The academic training received at the Society's school was no better or worse than that available at the public schools in taxpayers' community, consisting of about ten thousand people.
During the 1967 to 1968 school year, one hundred and ninety-three children attended the school operated by the Society. The cost of operating the school amounted to about three hundred and thirty-eight dollars per student. During the taxable year 1968, two of the taxpayers' children attended this school for a period of thirty-nine weeks.
Section 170 of the Code, 26 U.S.C. § 170, allows as a deduction any charitable contribution payment of which is made during the taxable year. Section 170(c) defines a "charitable contribution" as including a "contribution or gift to or for the use of . . . a corporation . . . or . . . fund . . . organized and operated exclusively for religious . . . or educational purposes."
The Tax Court, relying upon its decision in Harold DeJong, 36 T.C. 896 (1961), affirmed sub nom. DeJong v. C. I.R., 309 F.2d 373 (9th Cir. 1962), held that to the extent of six hundred and forty dollars, the taxpayers' payment to the Society was not a "contribution or gift" to the Society, because it proceeded primarily from the incentive of anticipated benefit to the taxpayers "beyond the satisfaction which flows from the performance of a generous act . . ." Said the Tax Court:
". . . we are persuaded that the contributions made by petitioner to the Society in 1968 were substantially induced by the benefits anticipated by him from the enrollment of his two children in the Society\'s school and were, to a substantial extent, in the nature of tuition."1 30 T.C.M. at 1178.
In their brief in this court, taxpayers apparently accepted the subjective test applied by the Tax Court involving taxpayers'...
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Hernandez v. Commissioner of Internal Revenue Graham v. Commissioner of Internal Revenue
...method of valuation an inquiry into the cost (if any) to the donee of providing the good or service. See, e.g., Oppewal v. Commissioner, 468 F.2d 1000, 1002 (CA1 1972) (cost of providing a "religiously-oriented" education); Winters v. Commissioner, 468 F.2d 778 (CA2 1972) (same); DeJong v. ......
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Hernandez v. C.I.R., 86-1276
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